News overview

JudgeCo update 2: Global principles cited by English and American Courts

In the JudgeCo project we recently started with drafting the first internal set for “EU Cross-Border Insolvency Court-to-Court Cooperation Guidelines”. These non-binding guidelines will be developed for application in cross-border communication and cooperation in insolvency cases between courts within the European Union.

The draft will be greatly influenced by the responses from our Review & Advisory group to the two questionnaires, received in July and in October. The questionnaires contain a selection of the Global Principles for Cooperation in International Cases (‘Global Principles’), which were published in June 2012 by the American Law Institute (ALI) and International Insolvency Institute (III). See for the full text: http://www.iiiglobal.org/component/jdownloads/finish/557/5932.htm.

A strong signal of the practical use and guidance the Global Principles has been given by the Supreme Court of The United Kingdom (Conjoined Appeals in (1) Rubin & Anor v Eurofinance SA & Ors and (2) New Cap Reinsurance Corp Ltd & Anor v Grant and others) [2012] UKSC 46 (24), referring to “…the modern approach in the primary international and regional instruments, the EC Insolvency Regulation on Insolvency Proceedings … and the Model Law, which is that the jurisdiction with international competence is that of the country of the centre of main interests of the debtor (an expression not without its own difficulties). It is ultimately derived from the civil law concept of a trader’s domicile, and was adopted in substance in the draft EEC Convention of 1980 as a definition of the debtor’s centre of administration": see Report by M Lemontey on the draft EEC Bankruptcy Convention, Bulletin of the European Communities, Supp 2/82, p 58; American Law Institute, Transnational p. 4 Insolvency: Global Principles for Co-operation in International Insolvency Cases (2012), Principle 13, pp 83 et seq."

The United States Court of Appeals for the Third Circuit (in Re ABC Learning Centres) on 27 August 2013 has made references to Global Principle 1, and cites that it elaborates “… the overrid-ing objective [is to] enable[] courts and insolvency administrators to operate effectively and effi-ciently in international insolvency cases with the goals of maximizing the value of the debtor’s glob-al assets, preserving where appropriate the debtors’ business, and furthering the just administration of the proceeding.” Another part of the Global Principles report is cited: “[T]he emphasis must be on ensuring that the insolvency administrator, appointed in that proceeding, is accorded every possi-ble assistance to take control of all assets of the debtor that are located in other jurisdictions.” Id. at cmt. to Global Principle 24.” These court cases demonstrate the usefulness of soft law, providing not only food for thought but also guidance for courts.

 

Co-funded by the
Civil Justice Programme
of the European Union
 

Co-funded by the
International Insolvency Institute

 

 

 

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